Development of a model-based netsourcing decision support system using a five-stage methodology

Managers increasingly face netsourcing decisions of whether and how to outsource selected software applications over the Internet. This paper illustrates the development of a netsourcing decision support system (DSS) that provides support for the first netsourcing decision of whether to netsource or not to do so. The development follows a five-stage methodology focusing on empirical modeling with internal validation during the development. It begins with identifying potential decision criteria from the literature followed by the collection of empirical data. Logistic regression is then used as a statistical method for selecting relevant decision criteria. Applying the logistic regression analysis to the dataset delivers competitive relevance and strategic vulnerability as relevant decision criteria. The development concludes with designing a core and a complementary DSS module. The paper critiques the developed DSS and its underlying development methodology. Recommendations for further research are offered.